Keeping Pace with Change: International Competition in Printed Circuit Board Assembly

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Abstract
The Organizational and technological basis of production does not stand still, even in apparently ‘mature’ industries. Printed circuit board assembly has long been regarded as best conducted with well-known techniques in low-wage economies. That has steadily changed, based not only on innovations specific to the industry but more importantly on incremental but continuing generic progress in manufacturing and design processes. Generic innovations encompas increased automation, but the key developments have been the organizational changes associated with ‘just-in-time’(JIT) manufacturing and the recent extensions of JIT-type principles to the design process. Through interviews in six countries and drawing on relevant technical expertise and literature, we develop factory models that simulated production in different settings and demonstrate the significant production cost savings that accrue through the adoption of these innovations. Gains accrue through reduced scrap and inventories, and through better time management of the firm's assets. I As such gains reach their limits, product redefinition becomes an important strategy. It follows that the ability to keep pace with ongoing innovations is a much more powerful determinant of competitiveness than cost advantage due to low wages. Especially in less developed countries, firms will need to undertake substantial investments in human capabilities, including the capacity to tap international knowledge flows on a continuing basis.

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